Market report: Just Eat leaves nasty taste as City digests slowing growth

Comments Off on Market report: Just Eat leaves nasty taste as City digests slowing growth

The bears were licking their lips today as online takeaway company Just Eat revealed that order growth was still slowing.

The FTSE 250 business said order growth slowed in the UK to 28% from 50% a year ago — good news for the short-sellers which are betting against the company.

Almost 5% of Just Eat’s shares are out on loan to hedge funds including Marshall Wace and Citadel which are hoping to cash in on a share price decline — wagers worth close to £200 million.

The shares were off 15p, or 2.7%, at 546p. Some traders suggested this was because investors were taking profits after last week’s share-price surge but others blamed slowing order growth.

The fall came despite the company nudging up its full-year underlying profit guidance to between £109 million and £111 million and revenue forecast to £371 million as it fared well despite warmer-than-usual weather.

With less than a week to go until the US election, investors were in no mood to take risks and the FTSE 100 slid 27.63 points to 6889.51.

CMC Markets analyst Jasper Lawler said: “Election concerns have washed across from the Atlantic, sending European shares lower.”

EasyJet, the FTSE 100’s second-worst performer this year, improved 28.5p, or 3%, to 969p as HSBC decided it has taken enough of a battering and upgraded the airline from Reduce to Buy. 

Dublin-based packaging group Smurfit Kappa — up 73p, or 4.2%, to 1833p — was another to avoid the sell-off after beating analysts’ forecasts in its third-quarter results.

Clipper Logistics shares were 5p higher at 323p after the delivery firm confirmed a deal to roll out its click-and-collect joint venture with John Lewis to other High Street retailers.

Shares in Sirius Minerals, one of the year’s best-performing stocks, slumped 4.08p, or 11%, to 32.92p after it unveiled a huge funding deal to build its potash mine for fertiliser on the North York Moors National Park.

Stage one of its financing includes a discounted placing and open offer for £330 million to £400 million and an underwritten bond offer to raise between £326 million and £367 million, after a £245 million royalty deal with Australian billionaire Gina Rinehart’s Hancock Prospecting last week.

Finally, a rising share price is not normally seen as a bad thing, but that is one of the reasons profits this year at Caledonia Mining, off 10.5p at 122p, will be below analyst forecasts.

The Zimbabwe gold miner said the surge this year had caused share-based expenses to soar.

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November 3, 2016 |
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